WAIS Document Retrieval[Code of Federal Regulations]
[Title 24, Volume 2, Parts 200 to 499]
[Revised as of April 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR203.355]

[Page 186-187]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
PART 203--SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents
 
               Subpart B--Contract Rights and Obligations
 
Sec. 203.355  Acquisition of property.

    (a) In general. Upon default of a mortgage, except as provided in 
paragraphs (b) through (i) of this section, the mortgagee shall take one 
of the following actions within nine months from the date of default, or 
within any additional time approved by the Secretary or authorized by 
Secs. 203.345 or 203.346. For mortgages where the date of default is on 
or after February 1, 1998, the mortgagee shall take one or a combination 
of the following actions within six months of the date of default or 
within such additional time approved by HUD or authorized by 
Secs. 203.345 or 203.346:
    (1) Obtain a deed-in-lieu of foreclosure (see Secs. 203.357, 203.389 
and 203.402(f) of this part) with title being taken in the name of the 
mortgagee or the Secretary;
    (2) Commence foreclosure;
    (3) Enter into a special forbearance agreement under Sec. 203.614;
    (4) Complete a modification of the mortgage under Sec. 203.616;
    (5) Complete a refinance of the mortgage under Sec. 203.43(c);
    (6) Complete an assumption under Sec. 203.512;
    (7) File a partial claim under Sec. 203.371; or
    (8) Initiate a pre-foreclosure sale under Sec. 203.370.
    (b) Vacant or abandoned property. With respect to defaulted 
mortgages on vacant or abandoned property, if the mortgagee discovers, 
or should have discovered, that the property is vacant or abandoned, the 
mortgagee must commence foreclosure within the later of 120 days after 
the date the property became vacant, or 60 days after the date the 
property is discovered, or should have been discovered, to be vacant or 
abandoned; but no later than the number of months from the date of 
default as provided in paragraph (a) of this section. The mortgagee must 
not

[[Page 187]]

delay foreclosure on vacant or abandoned property because of the 
requirements of Sec. 203.606.
    (c) Prohibition of foreclosure within time limits. If the laws of 
the State in which the mortgaged property is located, or Federal 
bankruptcy law:
    (1) Do not permit the commencement of foreclosure within the time 
limits described in paragraphs (a), (b), (g), (h) and (i) of this 
section, the mortgagee must commence foreclosure within 90 days after 
the expiration of the time during which foreclosure is prohibited; or
    (2) Require the prosecution of a foreclosure to be discontinued, the 
mortgagee must recommence the foreclosure within 90 days after the 
expiration of the time during which foreclosure is prohibited.
    (d) Property located on Indian land. Upon default of a mortgage on 
property located on Indian land insured pursuant to section 248 of the 
National Housing Act (see Sec. 203.43h of this part), the mortgagee must 
comply with Secs. 203.350(b) and 204.664 of this part.
    (e) Property located on Hawaiian home lands. Upon default of a 
mortgage on property located on Hawaiian home lands insured pursuant to 
section 247 of the National Housing Act (see Sec. 203.43i of this part), 
the mortgagee must comply with Secs. 203.350(c) and 203.665 of this 
part.
    (f) Property located on the Allegany Reservation of the Seneca 
Nation of Indians. Upon default of a mortgage on property located on the 
Allegany Reservation of the Seneca Nation of Indians authorized by 
section 203(q) of the National Housing Act (see Sec. 203.43j of this 
part), the mortgagee must comply with Secs. 203.350(d) and 203.666 of 
this part, unless the mortgagor and the lessor have executed a lease 
renewal or a new lease either with a term of not less than five years 
beyond the maturity date of the mortgage, or with a term established by 
arbitration award. If a lease renewal or new lease has been executed, 
the mortgagee must comply with paragraph (a) of this section.
    (g) Pre-foreclosure sale procedure. Within 90 days of the end of a 
mortgagor's participation in the pre-foreclosure sale procedure, or 
within the time limit described in paragraph (a) of this section, 
whichever is later, if no closing of an approved pre-foreclosure sale 
has occurred, the mortgagee must obtain a deed in lieu of foreclosure, 
with title being taken in the name of the mortgagee or the Secretary, or 
undertake one of the actions listed at Sec. 203.355(a). The end-of-
participation date is defined as:
    (1) Four months after the date of commencement of participation, if 
there is no signed Contract of Sale at that time, unless extended by the 
Commissioner;
    (2) Six months after the date of commencement of participation, if 
there is a signed contract but settlement has not occurred by that date, 
unless extended by the Commissioner;
    (3) The date the mortgagee is notified of the mortgagor's withdrawal 
from the Pre-foreclosure Sale procedure; or
    (4) The date of the letter sent by the mortgagee to the mortgagor 
prior to the expiration of the customary participation period, 
terminating the mortgagor's opportunity to participate in the Pre-
foreclosure Sale procedure.
    (h) Special forbearance. If the mortgagor fails to meet the 
requirements of a special forbearance under Sec. 203.614 and the failure 
continues for 60 days, the mortgagee must undertake one of the actions 
listed at Sec. 203.355(a) within the time limit described in paragraph 
(a) of this section or 90 days after the mortgagor's failure to meet the 
special forbearance requirements, whichever is later.
    (i) Modification under Sec. 203.616, refinance under Sec. 203.43(c), 
or assumption under Sec. 203.512. Provided that the mortgagee has 
established the mortgagor's eligibility within the time frame provided 
in Sec. 203.355(a), if a mortgagee enters into a loss mitigation relief 
measure (i.e., modification under Sec. 203.616, refinance under 
Sec. 203.43(c), or assumption under Sec. 203.512) and it fails, the six-
month period provided in Sec. 203.355(a) is extended by an additional 90 
days to allow the mortgagee to try another loss mitigation tool or go to 
foreclosure.

[57 FR 47970, Oct. 20, 1992, as amended at 59 FR 50143, Sept. 30, 1994; 
60 FR 57678, Nov. 16, 1995; 61 FR 35018, July 3, 1996; 62 FR 60129, Nov. 
6, 1997]

[[Page 188]]



